Senator Eliot Shapleigh29th Senatorial DistrictEl Paso Countywww.shapleigh.orgAustin: 512-463-0129 or (800) 544-1990El Paso: 915-544-1990Improving the Border Region's CompetitivenessBorder Legislative ConferenceMarch 26, 2004

Improving the Border Region's CompetitivenessImproving Competitiveness The need for InvestmentInvest in InfrastructureInvest in Human CapitalIncrease Access to Capital and CreditInvest in Border Specific Economic GeneratorsInvest in Secured ManufacturingInvesting in the Border to Improve Competitiveness

Job Loss Across North AmericaKerry rips into Bush on jobsDemocratic presidential candidate John Kerry on Friday said job losses "rip the heart out of our economy" and criticized President Bush's ability to make up for the millions of jobs that have disappeared during his administration. "Kerry rips into Bush on jobs." Commercial Appeal (March 6, 2004).On job losses, simplistic solutions won't work February's astonishingly weak jobs creation data surprised many people, especially White House supporters, who expected a number in the hundreds of thousands Bush is now facing the grim prospect of being the first president since Herbert Hoover who will finish his term with fewer jobs than when he started. "On job losses, simplistic solutions won't work." Austin American Statesman (March12, 2004).

Jobs Shifting to ChinaChina now makes 80% of all toys sold in America.In Shenzhen, China the legal minimum wage is $0.33.Employers are not required to pay laborers pension or medical insurance.No labor contracts required. Source: "The World's Sweatshop: The Etch a Sketch Connection." The New York Times (December 7, 2003).

Foreign Investment in Maquilador sector down 7.5 percent2002: $2.43 billion invested in maquiladoras2003: $890 million invested in maquiladorasEmployment in Maquilador sector down 257,147 people between 2000 and 2003Since 2000, 183 maquiladoras have closedIn 2003, 35% of Ciudad Juarez faced unemploymentForeign Investment in Maquiladoras PlummetsSources: "Se hunde inversion extranjera." El Diario (October 2, 2003). "Panorama aterrador." El Diario (February 8, 2004).

Foreign Investment in Maquiladoras PlummetsEmployment Volatility in MaquiladorasWhile employment in the maquiladora sector was lower in 1998 than in 2003, employment has dropped significantly since October 2000.

Investing in the Border to Improve Competitiveness

Solution 1: Invest in InfrastructureTransportationWater and WastewaterTelecommunicationsEnergyCross Border TradeImproving the Border Region's Competitiveness

Invest in Infrastructure: Transportation

FUNDING TEXAS PROSPERITY: NORTH AND SOUTHState Average versus Border Region in per capita highway construction and maintenance spending from 1992-1998

Note: In the report, Bordering the Future Challenge and Opportunity in the Texas Border Region, published by Texas Comptroller of Public Accounts John Sharp in July 1998, the Texas-Mexico Border is defined as forty-three Texas counties beginning at the New Mexico state line in Anthony and running through El Paso all the way to San Antonio along Interstate 10, then down Interstate 37 to the north side of Corpus Christi on the Texas Gulf. The 43 Counties were then isolated from the rest of the state to illustrate disparities between Border counties and the rest of the state, as well as to see how the Border would compare to the nation if it were the 51st state. As the 51st state, the 43 counties rank dead last in per capita income; the rest of Texas ranks 18th.As the graph above depicts, wide range disparities in transportation funding between parts of the state exist.Fiscal Notes June 1999, Carole Keeton Rylander, Texas Comptroller of Public AccountsThe Border Where We Stand, January 2001 Update, Carole Keeton Rylander, Texas Comptroller of Public AccountsIbid

There is a backlog of $13 billion in needed wastewater and drinking-water projects in the Border RegionManagement of water resources along the border is fragmented legally and institutionallyInvest in Infrastructure: Water and WastewaterSource: Nitze, William A. "Meeting the Water Needs of the Border Region: A Growing Problem for the United States and Mexico." Center for Strategic International Studies, April 2002.Ciudad Juarez needs 1.5 billion gallons a day, current access is 5 million gallons.

Invest in Infrastructure: TechnologyTexas-Mexico Border Offers Unique Opportunity to Become High Technology Production-Sharing CenterMichie, Donald A., Ph.D.. "Testimony Beofre Senate Committee on Internation Relations and Trade, 78th Legislature." El Paso County Courthouse, El Paso, Texas. March 5, 2004.Texas-Mexico Border communities' logistics international trade services, transportation routes, distinct trade areasHigh technology in area with New Mexico and Texas research laboratoriesLower cost production sharing manufacturing of higher technology products

Invest in Infrastructure: EnergyGas Production Along the BorderTexasIn the year 2002, Texas produced almost 5,612,000,000 barrels of natural gas.Natural Gas Liquid Production1000 Barrels per day

Invest in Infrastructure: Cross Border TradeInvest in a "one stop" model at Border ports of entry to cross commercial vehicles in twelve minutes, not six hoursIssue "smart cards" to Border citizens, the most frequent travelers across Border points of entryAuthorize Border Mass Transit projects at key Border Metroplexes Invest in Border rail routes to shift cargo from commercial vehicles and lines to rapid rail and just-in-time marketsIncrease personnel at Border crossings to allow 24 hour port access

Invest in Infrastructure: What Texas Has DoneS.B. 913, 76th Session "One-Stop" Border Inspection Facilityfacilitate the flow of commerceimprove federal efforts aimed at interdictionprotect our public healthconserve our environment by decreasing the idling time of commercial vehiclesprotect the already severely overburdened highways along the Border by preventing overweight trucks from traveling on Texas' roadsPort Authority Feasibility Study, 77th Sessionreduced stop/no stop process is feasible for most trucksprocess does not add substantial infrastructure costslinking facilities will improve vehicle safety standards compliance

Investing in the Border to Improve Competitiveness

Solution 1: Invest in InfrastructureSolution 2: Invest in Human CapitalWorkforce TrainingImproving the Border Region's Competitiveness

Invest in Human CapitalPopulation Growth Along the Texas-Mexico Border

Invest in Human Capital: Workforce TrainingStates Investment in Workforce TrainingTexas vs. California

Training crt for Shapleigh

12500000

93700000

Funding Level

Sheet1

StateFunding Level

Texas12,500,000

California93,700,000

Sheet2

Sheet3

Finding Creative Avenues for Workforce TrainingFrontier of the Americas

The digital divide is the wedge between the "information rich" (those with higher-than-average incomes and levels of education) and the "information poor" (such as those who are younger, those with lower incomes and education levels, and those who live in rural areas or central cities). By closing the digital divide we can achieve educational equity. Through educational equity, the Frontier of the Americas Program can create sustainable links to education, community and commercial resources.Invest in Human Capital: Workforce Training

Investing in the Border to Improve Competitiveness

Solution 1: Invest in InfrastructureSolution 2: Invest in Human CapitalSolution 3: Increase Access to Capital and CreditLoan to Deposit RatioHome LendingImproving the Border Region's Competitiveness

Increase Access to CapitalTexas Trails the Country in Loan-to-Deposit Ratio15 Most-Populous StatesOrdered by 2002 Ratio

Increase Access to CapitalTexas Leads the Country in Subprime Lending

Texas Leads the Country is Sub-Prime Lending

Out of 331 MSAs nationwide, eleven of the top thirty MSAs with the largest percentages of subprime loans are in Texas, with seven of these of these eleven being in the top ten, and four of these top ten being Texas border cities.

MSA NamePopulationConventional Refinance LoansPercent Subprime

National Urban Total (All 331 MSAs Combined)1,763,48325.31

1El Paso, TX679,6221,76747.82

2Corpus Christi, TX380,7831,06146.84

3Laredo, TX193,11734245.32

4KilleenTemple, TX312,95268344.80

5BeaumontPort Arthur, TX385,0901,16044.48

6Miami, FL2,253,36210,70142.67

7Columbus, GAAL274,6241,79942.63

8San Antonio, TX1,592,3835,27041.90

9Memphis, TNARMS1,135,6147,57741.86

10GalvestonTexas City, TX250,15894441.63

Investing in the Border to Improve Competitiveness

Solution 1: Invest in InfrastructureSolution 2: Invest in Human CapitalSolution 3: Increase Access to Capital and CreditSolution 4: Invest in Border Specific Economic Generators Educational OpportunitiesAccess to Health CareTransnational LendingEconomic Development HubsImproving the Border Region's Competitiveness

ThunderbirdThunderbird's Garvin School of International Management in Glendale, AZ is the world's leading source of international management education and a pioneer in this field. Thunderbird's tripartite foundation of business courses, international and regional studies, and language and communication includes a broad range of business specializations. Invest in Border Specific Economic GeneratorsIncrease Educational Opportunities

The State has supported El Paso's number one priority, a four-year medical school at Texas Tech's El Paso Campus, by approving $95 million in Tuition Revenue Bonds for a Research Tower and a Classroom Facility at Texas Tech El Paso.The school will create over 1,000 new higher paying higher skilled jobs, will increase per capita income, create greater business opportunity, and improve quality of life.The fully developed medical school will have positive impact of $185 million on the community.Invest in Border Specific Economic GeneratorsIncrease Access to Quality HealthcareEl Paso Medical Center of the Americas

Banking on the Border Laredo's Financial CommunitySince 1970 when total assets only reached $102 million, the Laredo Region's banking community has flourished. Laredo bank assets rose from $102 million in 1970 to $1.7 billion in 1988, and by the end of 1994 the city of Laredo attained the status of a "$4 billion plus" banking center.

Invest in Port Specific Economic GeneratorsIncrease Transnational Lending OpportunitiesLaredo Banks include:International Bank of CommerceLaredo National BankWells FargoFalcon National BankFirst National BankSouth Texas National Bank

Chihuahua Local SuppliersMaterial Key Local Suppliers (Actual)Invest in Port Specific Economic GeneratorsIncrease Innovative Business Opportunities Along the BorderPotential New Local Suppliers

Investing in the Border to Improve Competitiveness

Solution 1: Invest in InfrastructureSolution 2: Invest in Human CapitalSolution 3: Increase Access to Capital and CreditSolution 4: Invest in Border Specific Economic Generators Solution 5: Invest in Secured Manufacturing Along the BorderImproving the Border Region's Competitiveness

Invest in Secured Manufacturing Along the Border

The Origin of an Impenetrable Vault of Security

Global SecureOrigins Center

Proprietary Information

Internal Use Only

A Global Crossroads for

Secure and Competitive Trade

- 1 -

Invest in Secured Manufacturing Along the Border

Monitored & Secure Loading

Access Authentication

Complete Shipment Profile

Move Security to Point of Origin

SecureOrigins

ASIA

MIDDLE EAST

EUROPE

AFRICA

AMERICAS

Global SecureOrigins Center (GSO)

7 Main U.S. Ports-of-Entry 90% of All Northbound Shipments (3.6 Million Truck-Crossings per Year)2,600 Maquila Plants along the U.S.-Mexico Border.

TM

1

S e c u r i t ySecureOriginsDemonstration Project

El Paso TX Juarez, MexicoSanta Teresa NM Chihuahua, MX

Competitiveness

GSO, Technology-DrivenResources and Capacity

2

S e c u r i t yExpand to 7 Major Ports

Otay Mesa_ CalexicoNogalesEl PasoLaredoHidalgo/PharrBrownsville

Competitiveness

Top 100 Maquilas (375 Plants)1/3 of all shipments and employees

G S O N e t w o r k

4

Protective Shield of SecureOrigins A safe haven for all cross-border shipments (northbound & southbound)

Maquila Market: 4,000 Plants and 4,000 Suppliers.Coverage of Latin America andleading global opportunities for GSO participants

3

Secure & Competitive Trade

From Origin to Destination, SecureOrigins will serve the 2,000 mile U.S-Mexico border.

PLUS coverage of Supplier Network 96 % of the suppliers to the Maquila Industry are U.S.-based companies.

Global Trade Lanes and Supply Chains

5

SecureOrigins/GSO will link the trade lanes and global supply chains being used by the Maquila Industry and its Suppliers

2000-2004 Copyright Holguin Group. All rights reserved

Proprietary InformationInternal Use Only

Shortened Supply Lines Increased Strategic relationships between the United States and MexicoUse tax incentives and infrastructure investment to induce manufacturers to utilize and expand maquiladora industrial baseInvest in Secured Manufacturing Along the BorderU.S. Strategic Manufacturing Zone

What do we have in common: "Investment"Improving the Border Region's CompetitivenessSenator Eliot Shapleigh29th Senatorial DistrictEl Paso Countywww.shapleigh.orgAustin: 512-463-0129 or (800) 544-1999El Paso Office: 915-544-1990